Futures Commission Advice 2

Hi, I'm not having much luck with this on the Retail Firms forum, maybe this is a better place for it.

I’m hoping to get advice on futures commissions. I would like to negotiate for lower rates, but I’m not sure what I should go for. I have a six-figure full-service account with a major futures house, set up through an LLC. The account includes access to an execution desk, research, and T-bills as margin (however I don’t use the execution desk). I’ve been averaging around 50 lots a day (25 round turns). I trade futures electronically, and pay 1.75 (per side) commission + 0.50 (per side) electronic platform charge + clearing/processing and NFA fees. So for example in COMEX Gold this comes to 3.82 per side. I also trade options through give-up brokers, and pay 1.75 to my house + give-up brokerage + fees.

It is the 1.75 commission to my house and the 0.50 electronic platform charge that I am looking to negotiate. Can anyone give me an idea of a fair rate that I should look for? Thanks very much.

 

I think .50 to .60 per side is a fair retail rate for the size you're doing. The short list of firms that I would suggest contacting are FuturePath Trading, Advantage Futures, and TransAct Futures. Although, I'm not sure what type of connectivity they have to Comex.

 

Thanks very much for the response.

To clarify, I have access to institutional brokers, research, execution platforms, etc....so I don't know if I should compare to discount retail brokers. Any comparisons to rates at MF Global, Calyon, Fimat, JP Morgan Futures, Citi, etc would be very helpful. I don't plan to move my account, I'm just looking for some comparisons.

 

Mirus Futures offers Comex Metals products for approx $5.50 per RT ($2.25 / side) all inclusive. mini-Metals are around $4.00 RT, all in.

 

Transaction Charges: (per half turn)

The transaction charges are as set out below and are in addition to the monthly software cost. These charges are quoted exclusive of exchange and clearing house fees and regulatory levies, which are subject to change according to local regulation and GNI reserves the right to pass on these changes for which notice will be given.

MF GLOBAL Individual PRO Rates

ALL ONLINE LIFFE, EUREX, MATIF, IDEM, CME AND CBOT FUTURES CONTRACTS

0 - 499 lots per calendar month: £2.00/€3.00/$3.00 one way for all trades
500 - 999 lots per calendar month: £1.00/€1.50/$1.50 one way for all trades
1,000 – 2,999 lots per calendar month: £0.50/€0.75/$0.75 one way for all trades
3,000 – 4,999 lots per calendar month: £0.25/€0.375/$0.375 one way for all trades
5,000 – 9,999 lots per calendar month: £0.20/€0.30/$0.30 one way for all trades
10,000 - 19,999 lots per calendar month: £0.15/€0.225/$0.225 one way for all trades
20,000 plus lots per calendar month: £0.10/€0.15/$0.15 one way for all trades

 

At 1000 contracts a day, you :

1. Should not pay any electronic charge - at most 0.05 a contract or a flat $250 or so a mnth. Indeed at your size/volume, you shouldn't pay any charge for electronic access.

2. The commissions i.e. what the broker collects BEFORE exchange fees, should be at most 0.75 per side.

In your case, for item (1) above yu are paying 0.50 and for item (2) $1.75. That's close to usury.

Your commissions are too high.

 

CPTrader,

I foolishly accepted these commissions when starting out last year. I was initially purely a position trader and so I wasn't very concerned with the costs of trading.

ASusilovic,

Where did you get those MF Global rates? I though that all rates were negotiated individually. Do you have a link or attachment of a MF Global document?


Thanks to all.